China’s industrial production and retail sales both slowed in the first two months of the year, highlighting the pressure...

China’s industrial production and retail sales both slowed in the first two months of the year, highlighting the pressure leaders will face to meet this year’s annual growth target even as the central bank governor said major stimulus wasn’t needed.

Industrial output rose 5.4 percent from a year earlier in January and February, the National Bureau of Statistics said Saturday, compared with the 5.6 percent median estimate of economists surveyed by Bloomberg. Retail sales climbed 10.2 percent from a year earlier, missing the 11 percent projected gain in the survey, while fixed-asset investment exceeded estimates with a 10.2 percent increase.

The reports highlight the choice facing policy makers: step up monetary and fiscal stimulus and build up more debt, or let the nation’s industrial engines slow further while reducing overcapacity in the steel, cement and coal sectors. Steel output fell in the two-month period, while aluminum output tumbled 7.7 percent, Saturday’s reports showed.

“The overall growth profile remains still gloomy,” said Zhou Hao, an economist at Commerzbank AG in Singapore. “The mix of data give us a worrying picture. Activity data remained weak while inflation and property prices are turning around.”

Speaking at a briefing just before the data release, People’s Bank of China Governor Zhou Xiaochuan sought to project an aura of calm about the economy, saying that the government will be able to meet its target of at least 6.5 percent growth over the next five years.

The industrial output slowdown was due to seasonal factors, an NBS official said in a statement posted on the agency’s website. Weak global demand, deterioration in sectors such as steel and chemicals, and a slump in tobacco output weighed on factory production, the official said.

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A bright spot was a pickup in investment in real estate development following stronger sales. The pace accelerated to 3 percent in the first two months from a year earlier compared with a 1 percent increase throughout 2015. The value of property sales in the first two months of this year surged 43.6 percent from a year earlier, while property sales in some mid-sized cities doubled.

Retail sales are still in a double-digit growth range, showing shows there’s no need to panic yet, said James Laurenceson, deputy director for the Australia-China Relations Institute at the University of Technology Sydney.

“Retail sales are struggling under the weight of weaknesses in the rest of the economy,” Laurenceson said. “This increases the pressure on the authorities to present households with a credible economic narrative to bolster the consumer outlook.”

(Updates to add economist comment in fourth paragraph.)

–With assistance from Ailing Tan To contact Bloomberg News staff for this story: Xiaoqing Pi in Beijing at xpi1@bloomberg.net. To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Jeff Kearns, Kevin Hamlin